Gold Import Duty Rises to 15%: Here's What It Means for Indian Jewellery Buyers
From weddings to festivals, gold buying in India may now become more expensive following a significant revision in import duties. On May 13, the central government increased import duties on gold, silver, and other precious metals, raising the total effective duty on gold imports to 15%. This change has left buyers questioning how jewellery prices will be affected at retail stores.
The decision comes amid efforts to manage rising import costs and protect foreign exchange reserves, given global uncertainties and tensions in West Asia. While the broader economic rationale is widely discussed, the immediate concern for most consumers is straightforward: will gold jewellery now cost significantly more?
What Has Changed?
Previously, imported gold attracted a total duty of around 6%, comprising a 5% Basic Customs Duty (BCD) and a 1% Agriculture Infrastructure and Development Cess (AIDC). Under the new structure effective May 13, the government has raised the BCD to 10% and the AIDC to 5%, pushing the overall import duty to 15%. The revised rates also apply to silver, platinum, precious metal coins, jewellery components, and related imports.
Interestingly, this marks a reversal from the Budget 2024 decision, which had reduced the import duty on gold from 15% to 6% to boost demand and curb smuggling.
How Much More Expensive Will Jewellery Get?
The exact price increase depends on several factors, including global gold prices, GST, purity, making charges, and the jeweller. However, imported gold has clearly become costlier. For instance, gold worth ₹1 lakh earlier attracted roughly ₹6,000 in import duty; under the revised rates, the same quantity could attract nearly ₹15,000 in duty—an extra ₹9,000 per ₹1 lakh of imported gold.
Whether the entire increase is passed on to customers immediately remains uncertain. Some jewellers may temporarily absorb a portion using old inventory, while others may gradually transfer the cost to buyers over the coming weeks. Either way, retail gold jewellery prices are expected to rise.
Gold Components Also Affected
Even small jewellery components used in ornaments—known as “findings” in the industry—now face revised duty rates. These include hooks, clasps, screw backs, catches, and connectors. Under the new structure, gold findings attract 5% duty, silver findings 5%, and platinum findings 5.4%. While these may seem minor, they add to the overall production cost of jewellery.
Why Did the Government Increase the Duty?
India imports vast amounts of gold annually, straining the country’s import bill and foreign exchange reserves. With global tensions and supply chain disruptions persisting, the government aims to reduce non-essential imports and control dollar outflows. Prime Minister Narendra Modi recently urged citizens to be mindful of discretionary spending on imports, including gold and foreign travel, as part of broader foreign exchange conservation efforts.
Impact on Consumers
For consumers, the impact will likely be most noticeable during wedding shopping and festive buying seasons. Families planning large jewellery purchases may face higher bills than expected. However, gold holds deep emotional value in Indian households—serving as savings, tradition, security, and a part of celebrations. Weddings, festivals, and gifting culture keep demand strong despite price fluctuations.
This could push more buyers towards lighter jewellery, gold exchange schemes, recycled gold, or minimalist designs that use less metal while maintaining elegance. While gold jewellery may become pricier in the coming days, India’s enduring love for gold is unlikely to fade anytime soon.
